Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Petra Sees ‘Green Shoots’ in Diamond Market After Slump

Sept. 24 (Bloomberg) -- Petra Diamonds Ltd., a producer of the gems in southern Africa, said there are signs of a recovery in demand after prices of unpolished stones slumped this year.

“The market is not that bad,” Chief Executive Officer Johan Dippenaar said in a telephone interview. “There are definitely some green shoots out there. We see good attendance at our tenders.”

Petra sells through auctions, or tenders, in Johannesburg and Antwerp. Unpolished, or rough, diamond prices have fallen about 19 percent this year, according to PolishedPrices.com, as Asian buying slowed and the euro crisis eroded consumption of the gems. Prices rose more than 20 percent in each of the past three years as producers struggled to keep pace with demand.

“If people realize Europe is not going to be a real doomsday scenario, confidence will return slowly but surely,” Dippenaar said today after the company reported a loss.

Petra held its first tender for the 2013 financial year earlier this month. Diamonds from the Koffiefontein and Williamson mines sold for more than it forecast, while prices for stones from its Cullinan and Finsch operations met company guidance.

The company, which produced about 2.2 million carats in its last financial year, said it expects output to increase about 30 percent to 2.85 million carats this year.

Petra climbed 7.6 percent to 118 pence by the close in London, the biggest gain among members of the 21-company FTSE 350 Mining Index.

Labor Unrest

The company gets most of its revenue in South Africa, where labor strikes have halted platinum and gold mines owned by Lonmin Plc and Gold Fields Ltd. Petra doesn’t see the unrest threatening its own operations because it has a smaller workforce, stable union membership and a different proportion of skilled workers, the company said.

“It’s always a concern when you see people revert to methods outside the laid-down legal procedures,” Dippenaar said. “I don’t want to say ‘Oh no, it can’t happen with us,’ because I don’t want to paint a target on our backs.”

The company today reported a fiscal full-year loss of $2.4 million, following profit of $53.2 million, on currency losses of $38.6 million.

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.